Hogan's carrot: reform to soften CAP cuts

If member states agree with a new proposal that will redistribute EU farming subsidies, they can protect their small and medium-sized farms from the brunt of the five percent budget cut in the EU's common agriculture policy (CAP).

That was the message to family farms which European commissioner for agriculture Phil Hogan delivered via the press on Wednesday (2 May) in Brussels.

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EU commissioner for agriculture Phil Hogan packaged a five percent budget cuts into an optimistic story (Photo: European Commission)

"I would say that the average farmer in each member state will have no cut under direct payments if this is managed well," said Hogan. He meant managed well by the national governments.

The commission is connecting the need to make cuts in the CAP budget - because of Brexit and new priorities for the EU - with a desire to make member states redistribute subsidies more fairly through mandatory capping, something which governments have previously resisted.

According to the commission, 20 percent of the EU's farms receive 80 percent of the subsidies.

Previously leaked versions of a legislative proposal to reform the EU's farm policy already showed that the commission wanted to cap the amount the largest beneficiaries may receive.

On Wednesday, Hogan confirmed that capping was on the table and revealed the figure, seemingly spontaneously.

"I might as well tell you today, €60,000 is the figure we will propose," he said.

The idea is that farms will not receive more than €60,000, and the excess above that ceiling is redistributed among smaller farms in the same member state.

This is Hogan's carrot: by giving bigger farms less, member states can soften the blow for their smaller farms.

"If this mechanism is used well ... it mitigates considerably the potential losses," said Hogan.

"The savings from capping will remain available to the member states to be used to support small and medium-sized farmers and possibly rural development," the Irish politician added.

"So, if member states use this possibility of capping and redistributive payments, all small and medium-sized family farms could have any cut in direct payments reduced to almost zero."

Lot of 'ifs'

However, it must be said that Hogan's reassurance to farmers depends on a lot of 'ifs'.

UK will be 'jealous'

In any case, the cuts in direct payments will be around 3.9 percent for most member states, Hogan noted. For six of them cuts will be lower, while for five member states the direct payment 'envelope' will even increase.

The Baltic states will see increases between 12.3 and 13.6 percent, while Portugal, Romania, Slovakia, will not have any decrease in direct payments regardless of how member states use the capping feature.

He even had a message to British farmers about the CAP reform, which will kick in after the UK has left the EU.

"The UK farmers will look at this very jealously and see what they are missing post-2020," Hogan said.

While the European Commission's post-Brexit EU budget proposal for 2021-2027 calls for a less-than-expected increase in spending, prime ministers of net payer countries have already called the starting proposal "unacceptable".

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